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The Effects of Value-Based Reimbursement on Medical Billing Services

Value based reimbursement based on an insurance claim form.Billing Advantage, Inc. is a full-service medical billing company, providing billing services to over 200 providers in 22 states.  We are interested in how changes in health care systems will affect both our customers and billing companies like our own.  It is clear that the shift towards Value-Based Reimbursement will have a very major effect on all aspects of the health care system.  This will include medical billing companies.

In brief, Value-Based Reimbursement means that healthcare providers are not only reimbursed on a fee-for-service basis, but at least part of their income depends on cost-saving and improved clinical outcomes for patients within certain categories.  This means that clinical practices will need to track clinical and financial outcomes to determine improvement, often using a wide array of measurement tools.

The effects of this on the health care system, and on the quality and cost of health care are not yet known.  It is, however, clear that during the transition, there will be a lot of extra work. In addition, overall profits for health care providers will probably drop in the short run as extra resources are diverted into meeting these new requirements.

Since many medical billing companies receive a percentage of the revenue generated by our customers, the dip of the health care provider revenue will cause our revenue to dip as well.  In addition to preparing for this financial strain, we need to prepare our staff to understand the changes – many of which have already started to arrive – and provide the training needed for this.

The services provided by medical billing companies varies widely.  Some include coding and some do not.  For many billing services, the provider is responsible for supplying the correct diagnosis and procedure codes, as well as any needed modifiers.  In these situations, the coding is ultimately the responsibility of the practice.  However, it is helpful if the billing service has some understanding of the new codes and modifiers so that errors can be caught and the practice can be informed of any needed changes in their coding practices.  For other billing services, coding is a major part of what they do.  In these situations, the changes in billing requirements are the direct responsibility of the billing service.

The outcomes reporting measures are generally the responsibility of the practice, not the billing service.  However, it is helpful if the billing service has some knowledge of these requirements and can at least direct the practice to available resources. Thus, the practice can get questions answered on what is required and what options are available.  This is a very complex field, and often the professional associations for each type of provider are the best resources for getting questions answered on coding, modifiers, and outcomes measures.

In sum, it is clear that the changes which are occurring in value-based reimbursement will have a major effect on all aspects of the health care system.  Billing companies need to stay up to date on these changes to prepare staff and to advise the practices we serve on where to seek additional information, thus minimizing the impact of these changes on the revenue stream, both for our customers and for ourselves. To learn more about implementing Value Based Reimbursement or speak with a billing expert at Billing Advantage, contact us today!


Richard Kaufman Richard Kaufman

Richard Kaufman LICSW has performed and overseen medical billing activities for over 30 years. Being a mental health provider himself, he has particular expertise in mental health billing. Rick is an experienced computer programmer and is an expert in medical billing software and EHR software and the interface between these. He has served as a consultant to billing software companies and continues to improve upon existing billing platforms with his programing expertise. As co-owner of Billing Advantage Inc., Rick is involved in all aspects of the company but his particular contributions to the business are in pricing and overseeing of employee productivity and AR.


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